A Blog by Jonathan Low


Dec 2, 2020

How the Pandemic Doomed Walmart's In-Store Robots

This is probably more about timing than an end to automation in retail. 

It was cheaper for Walmart to have human employees fulfilling online orders handle restocking. Once the systems are better understood - and the negative PR from firing workers in favor of robots during a recession is over - Walmart and other retailers will renew robot use. JL

Lisa Lacy reports in Ad Week:

The retailer found that human employees, who are now in store aisles more frequently to fulfill online orders, are equally effective in identifying out-of-stock products. “The cost of maintaining and operating the machines is sometimes far greater than paying people to do the same thing.” Plus, the news comes at a time of high unemployment for human workers. Walmart can get a PR boost from “firing robots in this economy.” Buy online pick up in store (BOPIS) services, which have seen massive growth this year, offer the most potential for robots in retail. Robots and humans work together to fulfill orders in these scenarios.

In early November, Walmart ended a five-year relationship with Bossa Nova Robotics through which it tested shelf-scanning robots in about 10% of its U.S. stores.

The news, first reported by The Wall Street Journal, came as the retailer reportedly found that human employees—who are now in store aisles more frequently to fulfill online orders—are equally effective in identifying out-of-stock products. A Walmart spokesperson told Adweek that the retailer will continue to test new technologies “to best understand and track our inventory and help move products to our shelves as quickly as we can.”

Bossa Nova declined to comment on its relationship with Walmart, but a spokesperson said the pandemic has “forced us to streamline our operations and focus on our core technologies.”

Despite this news, it’s hardly the end of the road for robots at Walmart—or other retailers. In fact, many are actively investing in multiple innovations as we speak. Here’s a closer look at why this particular experiment stalled, and what’s to come in retail automation.

Economics and misperceptions

There are a few reasons why the 6-foot-tall robots that illuminate shelves with beams of light were not meant to be at Walmart.

One technology executive, who asked not to be named because he is not authorized to speak on the record, said it boils down to financials: “The cost of maintaining and operating the machines is sometimes far greater than paying people to do the same thing.”

Kyle Rees, director and sector lead at research and advisory firm Gartner, agreed the economics of robots for inventory management probably didn’t make sense for a company of Walmart’s size. Plus, the news comes at a time of high unemployment for human workers.

“Walmart knows how to manage low-paid, hourly employees at scale,” the technology executive said. “I would wager they are cheaper than a fleet of giant shelf-stocking and inventory-taking robots.”

In addition, Walmart can get a PR boost from “firing robots in this economy.”

“There is no doubt in my mind that people at Walmart that work there would likely see this as a way for … Walmart to get around paying people for things,” added Brendan Witcher, an analyst at market research firm Forrester. “And in a company as big as Walmart, with this huge employee base, those are the kinds of things you’re trying to avoid right now.”

He likened the situation to bad press about employee treatment at Amazon warehouses earlier this year. But he noted that there could also have been accuracy issues with these robots—especially during the panic-buying phase of the pandemic when products were likely misplaced by frantic customers.

But robots also tap into a long-running fear of AI—especially AI taking jobs—even if that perception isn’t completely accurate.

“I would say that the research and some of the other thought leadership that’s out there today seems to suggest otherwise—that [if] AI robotics develop the right way, [they] end up augmenting what humans are able to do,” Rees said.

That, he noted, is what happened after Amazon’s 2012 acquisition of warehouse robotics company Kiva Systems. These orange Roomba-like robots ferry shelves within Amazon’s 110 U.S. warehouses to help employees fulfill orders as quickly as possible. And, by January 2019, Amazon reportedly had more than 100,000 of them.

“When Amazon acquired Kiva Systems, much of the same conversation was going on,” Rees said. “I think that was quickly replaced by what happened in reality, which is Amazon just became more efficient and they hired more people to work in their warehouses.”

But another problem unique to 2020 is the cold, impersonal nature of robots, which is particularly unsettling for consumers still quarantining in an ongoing pandemic. This social aspect influences not only how consumers experience the store, but how they experience the brand.

“I think a live marketplace still has this very human, warm kind of attachment to it,” Rees said. “It’s not because we [don’t] like seeing robots, it’s because we like seeing other people.”

Nevertheless, the future is bright for retail robots.

“There’s plenty of work for robots,” the technology executive said. “Covid makes for the golden age of robot opportunities.”

That includes streamlined order fulfillment, much like Amazon has done. This was on Walmart’s radar, too, long before the pandemic. At a Supercenter in New Hampshire, for example, a robotic system called Alphabot uses automated carts in a 20,000-square-foot warehouse-like space to help Walmart employees pick online grocery orders. In addition, the retailer just announced it is turning four U.S. stores into real-world testing environments for new technology to help tap into its 4,800-store footprint for omnichannel retail as quickly as possible.

What’s more, Rees sees an opportunity to expand robots within buy online pick up in store (BOPIS) services, which have seen massive growth this year. Per Witcher, BOPIS-dedicated stores offer the most potential for robots in retail, like the pickup-only stores Walmart operates in Canada. Once again, robots and humans work together to fulfill orders in these scenarios.

“One of the things that we hear is that the accuracy with which an in-store associate can actually pick the order, fulfill the order [and] make sure the order is in the right place would probably benefit from some of the existing robotic/high-tech solutions that are applied for more of the traditional warehouse center,” Rees said.

This has also been a big year for drone delivery experiments, which will undoubtedly continue. Expect to see drone applications expand into healthcare, too—especially in rural communities as the pandemic continues, perhaps in facilitating rapid Covid tests.

“The amount of patents that Amazon, Walmart, Google, all of these companies are going for in terms of drone delivery, there’s a noticeable year-over-year increase,” Rees said. “Sure, in-store robots are gone. But what’s happening outside of the store [is] where we can derive the future of robotics for many of these big brands.”


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